The Proposed Finance Bill Targets 8 Products Under The Introduced ECO LEVY

The Proposed Finance Bill Targets 8 Products Under The Introduced ECO LEVY

The government plans to impose a new environmental fee on producers and importers.

The Eco Levy, as suggested in the Finance Bill 2024, focuses on commodities that are regarded to have a detrimental environmental impact.

“There shall be a paid levy to be known as the Eco Levy on the goods specified in the Fourth Schedule manufactured in Kenya or imported into Kenya,” read the Finance Bill in part.

The following is a full summary of the tax, the commodities targeted, and how it will be paid.

As stated in the Finance Bill 2024, which outlines the tax measures that will fund the 2024/2025 Budget, the fee will be placed on commodities that contribute to noise, soil, and air pollution.

One notable product that will be impacted is mobile phones, particularly smartphones. Another often-used item set impacted by the levy is diapers.

Microphones, loudspeakers, earbuds, monitors, projectors, ATMs, and calculating devices, including cash registers.

Rubber tires used in automobiles, motorcycles, and bicycles will also be taxed.

Batteries or dry cells are also provided, as well as plastic packing bags.

Levy Charges and Payments

The charge will be applied at rates ranging from Ksh98 to Ksh1,800 per unit.

For example, smartphones were designated as products subject to a levy of Ksh225 per unit. The rubber tyers’ levy was recommended at Ksh1,000 per unit.

The diaper levy will be Ksh150 per kilogramme. In contrast, plastic bags will be taxed at Ksh150 per kg.

“The eco levy shall be paid to the Commissioner at the rate specified in the Fourth Schedule in the case of imported goods, by the importer at the time of entering into the country,” proposed the Bill in part.

CONSEQUENCE

Given that producers and importers would be paying more for their products, prices will rise as company owners shift the higher expenses to consumers.

Notably, the Eco Levy is not a new tax for the continent. For example, Ghana levies an Eco charge on imported electronic devices and rubber tires.

In West Africa, the levy ranges between Ksh788 to Ksh3,155.

Other countries having environmentally friendly tariffs include Seychelles, Switzerland, and Liechtenstein.

The Proposed Finance Bill Targets 8 Products Under The Introduced ECO LEVY